When using the master spell book, it's never been "drag and drop", as the UO interface just doesn't allow for it from the master book. You can still get the regular spell books and drag and drop (i.e. mage, necro, chiv, bushido, and ninjitsu), but will need to double click those icons.

The Master Spell Book will let you put icons on your screen, but you have to type in x and y coordinates, like on a grid. When in the Master Spell Book, click the arrow by the name of the spell, and it brings up the icon and a description. Then double click the icon, which should open a small window with areas to type in x and y coordinates, then hit the "move" button. It takes some experimentation and patience to do it, but I think it's worth it, because the icons become 1-click, and it allows you to put druid and cleric spell icons on.